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Liz Weston

Q&A: Social Security isn’t going broke

September 28, 2020 By Liz Weston

Dear Liz: You have addressed Social Security in your column recently and detailed the benefits to waiting until age 70 to take payments. I read that Social Security funds are expected to run out around 2035. At that time I’ll be 76 and would only get six years of benefits versus 13 years if I start at age 62. Do you still think it is wise to wait on benefits as Social Security may go away?

Answer: Social Security isn’t going anywhere. What’s being depleted is its trust fund, which is used to supplement the taxes Social Security collects to pay benefits. This trust fund is scheduled to be out of money in 2031, according to a new Congressional Budget Office estimate that takes into account the effects of the pandemic. Even if the fund is depleted, however, the system will still collect enough in taxes to pay 76% of promised benefits.

So benefits won’t stop, and it’s highly unlikely Congress would allow benefits to be cut for retirees and near retirees. Social Security is a hugely popular program, and such cuts would be politically unpopular, to say the least, which is why most experts predict that lawmakers will fix the system before that happens.

If you allow yourself to be panicked into starting benefits early, on the other hand, you’re permanently reducing your benefit by 30%. If you’re married and are the higher earner, you’d also be locking in a lower survivor benefit. A lower Social Security benefit can have a huge effect on your standard of living in retirement, so make sure you understand the facts about the system before making a decision you may live to regret.

Filed Under: Q&A, Social Security Tagged With: q&a, Social Security, Social Security solvency

Friday’s need-to-know money news

September 25, 2020 By Liz Weston

Today’s top story: Fear of bankruptcy holds too many people back. Also in the news: Saving for a down payment is only the start for homeowners, pressing pause on private student loans, and it’s time to revise your pandemic budget.

Fear of Bankruptcy Holds Too Many People Back
Many people could benefit from bankruptcy relief but don’t file because of fear, myths or misplaced optimism.

For Homeowners, Saving a Down Payment Is Only the Start
The down payment is just one cost to save for.

Should You Press Pause on Private Student Loans?
Forbearance isn’t the only way to get a more manageable private student loan payment.

It’s Time to Revise Your Pandemic Budget
Budgeting is more important than ever.

Filed Under: Liz's Blog Tagged With: Bankruptcy, expenses, homeowners, pandemic budget, private student loans, Student Loans

Thursday’s need-to-know money news

September 24, 2020 By Liz Weston

Today’s top story: Ask a Points Nerd: What Will Holiday Travel Be Like? Also in the news: Starter credit card options, how to avoid common and costly home renovation mistakes, and what to know about Sam’s Club’s new telehealth program.

Ask a Points Nerd: What Will Holiday Travel Be Like?
It’s hard to say how pent-up demand might affect this holiday travel season.

Starter Credit Card Options: Student Card or Secured Card?
They can both help you establish your credit history, but they function differently.

How to avoid common and costly home renovation mistakes
The key lies in good planning and financial strategizing

What to Know About Sam’s Club’s Telehealth Program
24/7 access to doctors.

Filed Under: Liz's Blog Tagged With: holiday travel, home renovation mistakes, Points Nerd, Sam's Club, starter credit card, starter credit cards, telehealth

Wednesday’s need-to-know money news

September 23, 2020 By Liz Weston

Today’s top story: Are cash management accounts safe? Also in the news: 6 items to add to your packing list for COVID-era travel, 5 myths about high-yield savings accounts during COVID-19, and how to talk about debt as newlyweds.

Are Cash Management Accounts Safe? How CMAs Protect Your Money
What to know about FDIC insurance.

6 Items to Add to Your Packing List for COVID-Era Travel
You don’t want to leave home without some of these less obvious items for travel.

5 Myths About High-Yield Savings Accounts During COVID-19
Mythbusting.

How to Talk About Debt as Newlyweds
Starting with a clean slate.

Filed Under: Liz's Blog Tagged With: cash management accounts, CCOVID-19, high-yield savings accounts, myths, newlyweds and debt, travel

Tuesday’s need-to-know money news

September 22, 2020 By Liz Weston

Today’s top story: 6 National Parks to visit this fall and where to stay on points. Also in the news: How to find travel insurance that offers COVID coverage, 7 Personal Finance Rules it’s OK to break during a pandemic, and How to save the economy for everyone.

6 National Parks to Visit This Fall, and Where to Stay on Points
National parks waive fees on National Public Lands Day. Here’s where you can take advantage of the discount.

How to Find Travel Insurance That Offers COVID CoverageHere’s what to look for when seeking a travel insurance policy to cover coronavirus-related cancellations.
Reas the fine print.

7 Personal Finance Rules It’s OK to Break During a Pandemic
Almost half of Americans reported a reduction in income and need to adjust how they manage household bills.

How to save the economy for everyone
It’s worse than the 2008

Filed Under: Liz's Blog Tagged With: COVID, personal finance rules, travel insurance

Fear of bankruptcy holds too many people back

September 22, 2020 By Liz Weston

The mystery isn’t why so many people file for bankruptcy each year. It’s why more people don’t.

Each year, only a fraction of the Americans who could benefit financially from bankruptcy actually seek relief. Economists say some don’t file because collectors aren’t aggressively pursuing them, while others may strategically delay filing because bankruptcy could benefit them more down the road.

Many bankruptcy attorneys have a much simpler explanation: Fear, a lack of information and misplaced optimism keep people from getting a fresh start. In my latest for the Associated press, why bankruptcy may be the best option for those struggling with debt.

Filed Under: Liz's Blog Tagged With: Bankruptcy

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